The Swiss government expects growth to accelerate to 1.4 percent this year as the the euro area’s debt crisis abates.
Swiss gross domestic product will rise 2.1 percent next year, the State Secretariat for Economic Affairs in Bern said in an e-mailed statement today. That compares with a forecast of 1.3 percent for 2013 and of 2.1 percent for 2014 given in March.
“The Swiss economy has held up relatively well in the spring of 2013, despite the ongoing recession in the euro area,” the state secretariat said in the statement. “However, the development is still mixed, with a robust domestic economy and subdued exports,” it said, adding that this trend is likely to continue this year.
Household consumption is a key factor for growth in Switzerland, helping the economy expand 0.6 percent in the first three months of the year, a faster rate than in the neighboring euro area.
The Swiss National Bank (SNBN) set a cap of 1.20 per euro on the franc in 2011 to ward off deflation and a recession. Along with consumer demand, that ceiling has allowed helped shield Switzerland from the six quarters of recession that have afflicted the euro area, the destination for nearly half its exports.
Household spending will increase 2 percent this year, compared with a previously projected increase of 1.9 percent, today’s statement showed. It will rise 1.7 percent in 2014, unchanged from the previous forecast.
Consumer prices are still weak. In May, they recorded their 20th straight month of annual declines, and SNB President Thomas Jordan said last month there was no risk of inflation for the foreseeable future.
According to the SECO’s group of experts, which is part of the economy ministry and publishes forecasts for the Swiss economy each quarter, consumer prices will fall 0.1 percent this year and rise 0.2 percent in 2014.
The SNB will give its own forecast for growth when it holds its policy review on June 20. Its latest forecast, also given in March, was for growth of between 1 percent and 1.5 percent for this year. It sees inflation of minus 0.2 percent this year, accelerating to 0.2 percent next year.
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